This wasn’t a surprise—VMware doesn’t have any other products that do x86 emulation, and it’s pretty clear that desktop virtualization (Fusion and Workstation) is not a high corporate priority. (Seriously, go to vmware.com and tell me if that looks like a company that sells desktop software).
Developing an x86 emulator with enough compatibility (and speed) to support all x86 software is not something VMware’s going to do for a side project. Especially since they still have to support Intel and ARM virtualization as well.
With Parallels, it's an "insider Preview", so it appears the limiting factor is Windows releasing a finished version of the OS that includes an emulation layer that works well enough on apple silicon that it's not a preview? Is that vmware's issue?
They are planning to release a preview version this year with support for ARM VMs only, the priority will be for Linux, as Microsoft didn't release an official Windows ARM version yet.
Developing an x86 emulator with enough compatibility (and speed) to support all x86 software is not something VMware’s going to do for a side project. Especially since they still have to support Intel and ARM virtualization as well.